IMF says Saudi economy remains resilient amid regional geopolitical tensions

RIYADH — Saudi Arabia's Ministry of Finance welcomed the International Monetary Fund's 2026 Article IV Consultation report, which said the Kingdom's economy has remained resilient despite geopolitical tensions in the Middle East.The IMF said Saudi Arabia entered 2026 with strong momentum after its economy expanded by 4.6% in 2025, driven by the gradual unwinding of OPEC+ production cuts and robust domestic demand. The report also noted an improvement in the Kingdom's fiscal position, with the non-oil primary deficit narrowing from 24.5% of non-oil GDP in 2024 to 23.3% in 2025.The report credited Saudi Arabia's long-term planning and strategic infrastructure investments for helping mitigate the impact of regional tensions. It highlighted the East-West pipeline, which can transport around 7 million barrels of crude oil per day to Yanbu Port, as a key factor in maintaining export resilience.The IMF said Saudi Arabia has sufficient fiscal space to support the economy if regional tensions persist, citing low government debt, substantial financial reserves, significant sovereign assets and the role of the Public Investment Fund. It also noted that the Saudi Central Bank's net foreign assets stood at $437 billion at the end of 2025 and assessed the Kingdom's public debt as sustainable, with overall sovereign risks remaining low.The report described the Saudi banking sector as well positioned to withstand external shocks, supported by strong capital and liquidity buffers and continued improvements in asset quality. Capital adequacy ratios reached 20.5% and 18.8% in 2025, while the ratio of non-performing loans fell to 1.0% of total lending, the lowest level recorded in a decade. The IMF also praised the Saudi Central Bank's efforts to safeguard financial stability through enhanced macroprudential measures.The IMF said Vision 2030 reforms have driven a decade of economic transformation by strengthening institutions, improving policy effectiveness, diversifying the economy and reducing dependence on oil. It added that Saudi Arabia has achieved several Vision 2030 targets ahead of schedule, while recording improvements in healthcare and education.The report also highlighted Saudi Arabia's leadership in adopting artificial intelligence across government services, healthcare, education and financial technology. It noted the Kingdom's strong performance in global rankings, including the United Nations E-Government Index and Oxford University's Government AI Readiness Index, and estimated that AI adoption could increase Saudi Arabia's real GDP by up to 6% over the next decade.The IMF concluded that Saudi Arabia continues to demonstrate economic strength and resilience in a challenging regional environment and said sustained structural reforms, together with prudent fiscal and monetary policies, will further strengthen the Kingdom's global economic position and support continued economic diversification.